Seniors' debt doubled in a decade, data show | Survey: Financial advisers don't always draw up formal statements | Report: Women take on less financial risk than men do
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March 22, 2013
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Seniors' debt doubled in a decade, data show
The median debt level for Americans 65 and older was $26,000 in 2011, compared with about $12,000 a decade earlier, Census Bureau data show. Seniors' debt represents a smaller amount than the median debt level among younger people, but the jump for the older generation was the largest of any age group. The Wall Street Journal/Real Time Economics blog (3/21)
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Industry Update
Survey: Financial advisers don't always draw up formal statements
Six out of 10 financial advisers said they don't create a formal investment policy statement for every client, and a similar proportion said their clients wouldn't maintain such a plan, according to a Russell Investments survey. Wealthier clients were most likely to receive a written plan, according to the survey. "One of the best ways an adviser can fulfill their fiduciary duty and encourage a client to stick to a long-term, disciplined plan is to develop a statement of their objectives and related recommendations," said Rod Greenshields of Russell Investments. InvestmentNews (free registration) (3/21)
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Report: Women take on less financial risk than men do
Women tend to invest more conservatively than men do, and the tendency could raise the possibility that women will reach retirement without enough money, a report says. Men invest in higher-yielding vehicles and have larger retirement-account balances than women, the report from says. "Insufficient market exposure is going to cause a compounding gap over time," said Priya Haji, CEO of SaveUp. CNBC (3/21)
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Study: Under-30 crowd lacks knowledge of mutual funds
Affluent young investors aren't as familiar with mutual fund companies as older investors are, and they don't understand what the funds have to offer, a study indicates. To reach investors under 30, mutual fund providers must start "engaging with them meaningfully in places and through media where they spend their time and energy," says Meredith Lloyd Rice of Cogent Research, who authored the study. AdvisorOne (3/21)
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Experts discuss how to plug 401(k) leakage
Getting to the root causes of 401(k) leakage is essential if U.S. workers are going to enjoy a secure retirement, experts told a Senate committee. Most 401(k) withdrawals are used to avoid circumstances such as foreclosure, but cash-outs and permanent withdrawals are far more damaging to retirement security, said Alison Borland of Aon Hewitt. A lack of other savings, such as for college and emergencies, also puts many Americans at risk for an underfunded retirement and is prompting more employers to discuss financial wellness, experts said. InvestmentNews (free registration)/The INsider blog (3/20)
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Financial Literacy
Investor app will let users mimic Buffett and other billionaires
A mobile application called iBillionaire will let ordinary investors track the activity of 10 billionaires, including Warren Buffett, Carl Icahn and David Einhorn. The app, available next week, is built on investment data available through 13-F filings with the Securities and Exchange Commission, and it offers investment suggestions. MarketWatch (3/21)
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On the Economy
Housing market's turnaround creates challenges for buyers, sellers
The housing market rebound, combined with a low inventory of homes for sale, is leading to bidding wars among buyers and price spikes in some areas. The situation leaves some sellers reluctant to list their homes out of fear they'll sell before they can secure a new home, which is keeping inventory low. Meanwhile, builders are struggling to hire enough workers to meet the demand for new construction. The New York Times (tiered subscription model) (3/20)
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Bernanke hints at possible departure from the Fed
Federal Reserve Chairman Ben Bernanke is sending signals that he may step down, Hans Nichols writes. "I don't think that I'm the only person in the world who can manage the exit," Bernanke said in reference to stimulus efforts. Bernanke also said he has discussed his future with President Barack Obama. Bloomberg (3/21), The Christian Science Monitor (3/20)
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Building Your Practice
How to prod market-spooked clients into action
Investors are more motivated by the pain of past losses than by the possibility they may see future gains, writes Ken Haman of AllianceBernstein. Advisers can deal with this by explaining to clients that they have a problem, how the problem happened, what might happen if they don't take action and what action they should take. Better Practice blog (3/20)
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People who are brutally honest get more satisfaction out of the brutality than out of the honesty."
-- Richard Needham,
Canadian humorist
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